Exporting Refined Gold Enquiry

[IlyK]

Hello guys,

I'm new, so please bare with me!

Before I begin, I am based in the UK! (So the post below may makes more sense!)

I have a few trusted contacts in the jewellery industry who can offer me scrap gold in bulk (98% below spot). So recently, I have began researching the refining process etc, but my main concern is this .... Who do I actually sell it to once it has been refined?

The obvious answer would be the jewellery industry, possibly certain manufacturing industries. However, I have contacted a handful of jewellery manufacturers and it seems they are quick to say 'no thanks' before I even offer a rate! I can only assume there is loyalty involved between the refiners and the jewellers.

I am quite familiar in the importing/exporting sector, so I was wondering if actually exporting the refined gold would be feasible? To a country which has 0% import duty on gold.

Just thought I'd pop the question before I proceed any further

Any assistance or guidance would be highly appreciated


Kind Regards,

 

[nickvc]

Welcome to the forum.
I think you mean your paying 98% of spot not 98% below spot.
I used to run my own refinery for many years and packed up because there is so little manufacturing base left in the UK that the demand for carated product was so low as to make it uneconomical to carry on. The problem your going to have is that the market only wants or accepts good delivery bars and your not going to achieve that, whatever you produce will have to go to one of the large refiners or banks for their accreditation and they won't pay spot for your gold, they can name their price and probably will. While gold is still so high you will get maybe 99.5 % of spot or a little more if you have serious volume,50-100 kilos a week, but if your looking to move small volumes they won't pay top prices. Your only hope is to find an overseas buyer who trusts your material and who you also trust to be paid for it, no easy ask.

 

[4metals]

In the US refining in quantity at todays prices costs you between one quarter and one eighth of a percent. Then you have to sell it as Nick mentioned. In quantity that can be another one eighth of a percent.

The smart money is to melt and fire assay it yourself because if you are talking quantity you can get it sold and refined for one half a percent and possibly less if the quantity warrants.

 

[IlyK]

Hello guys,

Thanks for the responses.

I reckon I might just give it a go overseas, try and source some potential buyers.

In terms of rates, would you say 3% over spot is a fair rate for pure gold?


Kind Regards,

 

[patnor1011]

Hardly.
Only if it will be guaranteed and recognizable. I mean you will hard get that money without assay certificate which will cost you. Another thing is that just stamping something on top wont work until it is widely accepted mark.

 

[4metals]

Buying at 2% under is where you will make your money. With enough quantity you could make 1 1/2% clear. At $1300 gold that's $19.50 per fine ounce. So if you were able to buy 200 ounces of scrap a day at an assay of say .55% that's $2145 a day in profit.

The profit comes from knowing exactly what the material assays at and paying out fairly. If you could move quantity at a 1.5% margin you can do extremely well. You need to learn to sample properly, pay quickly (likely with an XRF result) and fire assay your material before shipping.

Refiners today are working on much much slimmer margins.

 

[nickvc]

You won't be able to get anywhere near 3% over spot for your refined gold, to be honest you will be lucky to get spot. The market wants good delivery bars and they can be purchased if in volume at 1/4-1/2% over spot, so your unmarked gold will have to be cheaper. As 4metals advised the best route is melt and assay and sell on to the refiners but to get decent rates large volumes are going to be needed.
The bonus can be the other values such as silver or palladium if you sort out the 18k white and melt and assay independently, in some cases you might do better going for a higher return on the gold and ignore the other metals to help offset the refining charges.

 

[IlyK]

Cheers guys, appreciate the guidance

Got a busy week ahead of me now, wish me luck!


Kind Regards,